Budget gap narrows to P44 billion in April

MANILA, Philippines — The country’s budget deficit narrowed by 84 percent to P44.4 billion in April from a year ago, the Bureau of the Treasury (Btr) said yesterday.

However, despite the drop in April, the cumulative deficit from January to April was still up by 1.63 percent to P365.9 billion from P360 billion in the same period last year.

The BTR attributed the drop in April’s budget shortfall to the 55 percent growth in revenues as income taxes poured in, coupled with the 27.14 reduction in expenditures coming from a high base at the height of the strict lockdown in the same period last year.

In April, revenues rose to P291.9 billion from a year ago.

From January to April, total collections also increased by nearly four percent to P988.4 billion, with tax revenues growing by 20 percent year-on-year and accounting for 91 percent of total collections for the four-month period.

These comprise collections by the Bureau of Internal Revenue (BIR), Bureau of Customs (BOC), Treasury income, and collections from other offices.

The BIR contributed the bulk of the growth in revenues in April with actual collections of P219 billion, more than double last year’s collections of P90.5 billion.

The BTr attributed this to “the timing of payment of income taxes.”

With its April performance, BIR’s cumulative revenue also improved to P688.7 billion, up by 23.14 percent from January to April 2020 comparable outturn.

Similarly, collections by the BOC in April amounting to P51.8 billion topped last year’s revenue by 50.42 percent, driven by the continued improvement in importation volume.

Year-to-date, the BOC has collected P201 billion, surpassing the P179.7 billion achieved in the first four months of 2020 by 11.81 percent.

Treasury income, however, fell by 84.5 percent in April to P9 billion, coming from the high base effect of last year’s remittances in compliance with RA 11469 or Bayanihan I.

The decline in income from government services and dividends on shares of stocks held by the government was partially offset by the higher income from interest on advances from state-owned firms and government deposits.

Year-to-date, Treasury collection was also lower by 71.46 percent due to the same factors as well as lower national government share from PAGCOR income and interest on advances.

Revenue from other offices such as other non-tax collections including privatization proceeds and fees and charges rose to P10.8 billion, far exceeding last year’s collection by P6.3 billion.

Growth was partly driven by the remittance of the Bases Conversion Development Authority (BCDA) of the disposition proceeds amounting to P2.7 billion as well as the eased restrictions on the operations of government collecting offices versus last year.

Year-to-date collection of P41.9 billion also indicated a 17.35 percent improvement over the same four months last year.

Meanwhile, expenditures for April totaled P336.3 billion, down by 27.14 percent year-on-year owing to the high base effect of releases for COVID-19 emergency response and measures under RA No. 11469 or the Bayanihan to Heal as One Act in 2020.

Nevertheless, year-to-date expenditure of P1. 354.3 trillion was still up by 3.31 percent from last year, with primary spending making up 89 percent  of the total disbursement.

April primary expenditure declined to P312.5 billion from last year’s P439.8 billion. Meanwhile, the cumulative primary spending as of end-April was still up by 3.03 percent year-on-year to P1. 204.6 trillion.

Interest payments as a share of total revenues for the month increased by 8.86 percent year-on-year to P23.8 billion largely due to coupon payments for reissued Treasury Bonds.

Netting out interest payments, the national government registered a P20.6 billion primary deficit for April, significantly lower than the primary deficit recorded for the same month last year.